The threats made by Donald Trump our country to impose 25% tariffs to all products until the flow of drugscaused the rating agencies Moody’s y Standard and Poor’s will revise downwards the growth of Mexico for the following year.
Moody’s surprised by estimating that the Gross domestic product It can reach just 0.6% in 2025 if the plan of the new president of the United States who takes office on January 20 comes to fruition.
“The economy will be affected in the next two years through trade, investment and, above all, remittances… and the exchange rate will be shaken by aversion,” estimated the financial house.
You might be interested: Standard and Poor’s also reduces prospects for Mexico… for Trump
For its part, Standard and Poor’s (S&P) also lowered Mexico’s growth expectations from 1.5% to 1.2%, given the risks that are approaching with Donald Trump. The risks, he explained, are also due to the constitutional changes in Mexico, but the others are linked to the American one.
“If restrictive immigration measures are imposed, the arrival of remittances will also be stopped and the internal demand of families that send resources to them may be stopped.”
Kennet Smithformer chief negotiator of the T-MEC He commented that the Government of Mexico must immediately meet with Trump’s transition team to stop this media war and begin a constructive dialogue on migration and security.
“At the same time, a strong message must be sent that our country will be forced to impose malicious retaliation on the American economy.”
You might be interested in: Moody’s cuts Mexico’s growth outlook to 0.6% due to Trump
“No one will win with a trade war”: China
China warned that “no one will win a trade war,” after the president-elect of the United States, Donald Trump, announced that he will impose an additional 10% tariff on imports from the Asian giant.
The measures that the Republican leader wants to implement since his inauguration in January also affect Canada and Mexico, although in these cases with tariffs of 25%.
Trump justified them due to the crises linked to opioids and migration. “China views Sino-US economic and trade cooperation as mutually beneficial,” said Liu Pengyu, spokesman for the Chinese embassy in the US.
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How can Mexico diversify its economy to reduce the potential negative effects of U.S. trade policies?
Interview between Time.news Editor and Economic Expert
Editor: Welcome to Time.news! Today, we have a special guest, Dr. Ana Rodriguez, an expert in international economics and trade policies. Thank you for joining us, Dr. Rodriguez.
Dr. Rodriguez: Thank you for having me! I’m excited to discuss these pressing issues.
Editor: Let’s dive right in. Recently, there have been alarming forecasts by Moody’s and Standard and Poor’s about Mexico’s economic growth for 2025. They attribute these revisions to potential tariffs from the incoming U.S. president. Can you explain the implications of a proposed 25% tariff on Mexican products?
Dr. Rodriguez: Certainly! Imposing such steep tariffs would disrupt trade significantly. Mexico exports a substantial amount of goods to the U.S., and a 25% tariff would not only increase prices for American consumers but also strain Mexican manufacturers who rely on exports for their revenue. This protective measure could lead to a decrease in both investment and economic growth.
Editor: Speaking of economic growth, Moody’s has projected that Mexico’s GDP might only reach 0.6% in 2025 if the new president’s plans go into effect. How does this compare with previous growth estimates, and what factors are at play here?
Dr. Rodriguez: That’s a stark decrease from previous expectations. Generally, Mexico has been seen as a growing market, but the uncertainty surrounding the U.S. administration’s trade policies, mixed with constitutional changes in Mexico that might affect business confidence, is creating a very volatile environment. It could discourage investment and ultimately dampen economic growth.
Editor: Standard and Poor’s has also lowered its growth expectations from 1.5% to 1.2%. What are the broader ramifications of such economic downgrades for Mexico?
Dr. Rodriguez: These downgrades can have serious repercussions. They potentially affect Mexico’s credit rating, making borrowing more expensive. Lower growth projections can lead to higher unemployment, reduced public spending, and can ultimately impact everyday Mexicans through lower wages and diminished quality of life. Moreover, this creates a ripple effect that could hinder trade negotiations going forward.
Editor: You mentioned uncertainty, which is already affecting currency valuation. How do you foresee the exchange rate reacting to these developments, especially considering the aversion likely to arise from investors?
Dr. Rodriguez: Volatility in the exchange rate is expected. If investors perceive Mexico as unstable due to external threats and internal policies, they will likely move their capital elsewhere. This could devalue the peso, increasing inflation which further complicates economic recovery. The ramifications will be felt by consumers and businesses alike, as the cost of imported goods rises.
Editor: You touched on the subject of remittances earlier. How significant are they in the context of Mexico’s economy, particularly in light of these tariff threats?
Dr. Rodriguez: Remittances are crucial to Mexico’s economy—almost 3% of GDP comes from these funds sent back by Mexicans living abroad, particularly in the U.S. Tariffs and unfavorable policies could affect the jobs and earnings of these individuals, potentially leading to a decrease in the amount they send home. This would have a direct impact on families relying on this income, exacerbating poverty levels in certain regions.
Editor: As the situation unfolds, what strategies do you think Mexico should implement to mitigate these risks?
Dr. Rodriguez: Mexico will need to diversify its trade partners and strengthen economic ties with other regions, such as Europe and Asia. Additionally, bolstering internal industries to minimize dependency on exports could safeguard its economy. It will also be crucial for Mexican lawmakers to ensure domestic policies support stability and growth, encouraging both local and foreign investment.
Editor: Thank you, Dr. Rodriguez, for sharing your insights with us today. Clearly, the economic landscape is shifting, and it will be fascinating to see how Mexico navigates these challenges moving forward.
Dr. Rodriguez: Thank you for the opportunity! The coming years will indeed be crucial for Mexico’s economy. Let’s hope for informed policymaking and positive outcomes for the Mexican people.
Editor: Thank you to our viewers for tuning in. Stay informed with Time.news as we continue to follow these important developments.